Due Diligence Guidances

Due diligence has emerged as the fundamental and essential behaviour expected of any responsible business. The 2011 revision of the OECD Guidelines for Multinational Enterprises (OECD Guidelines) and the adoption of the UN Guiding Principles on Business and Human Rights (UNGPs) raised the expectation of due diligence by companies to an international consensus. Until now, however, there was no agreement over what due diligence really means.

Image: OECD

OECD Due Diligence Guidance for Responsible Business Conduct," June 2018 The OECD Guidelines for MNEs acknowledge and encourage the positive contributions that business can make to economic, environmental and social progress, but also recognise that business activities may result in adverse impacts related to corporate governance, workers, human rights, the environment, bribery, and consumers. Due diligence is the process enterprises should carry out to identify, prevent, mitigate and account for how they address these actual and potential adverse impacts in their own operations, their supply chain and other business relationships... The purpose of due diligence is first and foremost to avoid causing or contributing to adverse impacts on people, the environment and society, and to seek to prevent adverse impacts directly linked to operations, products or services through business relationships. When involvement in adverse impacts cannot be avoided, due diligence should enable enterprises to mitigate them, prevent their recurrence and, where relevant, remediate them.